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The tax compromise debacle

In response to my comment last evening that TEA Party types took it in the rear yesterday on the tax compromise, Stephanie writes:

The TEA party has been advocating for lowered tax rates which they got in the form of continuation of the current tax rates (no increases on anyone), reductions on payroll taxes, reductions on business taxes, reductions on estate taxes (under current rules would have gone to 55% not 35%), adjustments to the AMT so less people will be ensnared in that crapfest and all they had to give up was unemployment extensions and EITC.

And sure. That’s one way of looking at things.

But from my perspective, the deal was a dog for classical liberals, and here’s why: The Dems had to agree to the extensions. Obama wasn’t going to veto anything (he needed his Congress to stop the GOP’s demands to give himself cover for 2012), and too many Dems up for election in the next cycle saw what happened in early November to back Obama’s idiot play to raise taxes in a recession. They don’t believe the standard Dem line about why the party was “shellacked,” evidently, and so are covering their own asses with an eye toward 2012, as well.

A 35% estate tax — up from 0% — is a tax hike, plain and simple. Those who claim that we should be thrilled that 35% (on $5 million plus) is down from 55% (where it would have gone if the current rates expired) are buying into the progressive framing of events, namely, that all the extensions are “tax cuts” — and that that money somehow belongs to the government as part of its revenue stream. The payroll tax break of 2% — for a year only — is essentially an extension of a stimulus perk, and will do NOTHING to stimulate job production. $800 a year? Really? And for that the President was able to secure an extension of his giveaways to those who don’t pay taxes to begin with, and to add an additional year to unemployment benefits,* with no money to pay for such things (my bet is, employers will be asked to throw in more — which will actually hurt job growth) available? The tab for those concessions alone is going to be somewhere in the neighborhood of $60-$90 billion of new spending.

In the “progressive” age of entitlements, those “extensions” of what are essentially welfare giveaways disguised as relief measures, are just additional entitlements the GOP is going to have to “take away” to keep from their becoming permanent. The left will demagogue the hell out of them, too.

What I’d like the Tea Party to push for next is a flat or fair tax: once everyone has skin in the game, the likelihood of making permanent the client state the Dems have been building — where nearly half of all people don’t pay federal income taxes, and so are permanent Dem voters (every election begins with a 47% Dem advantage?) — is greatly lessened.

And I think the thing could sell as a direct rebuke to the class warfare rhetoric of the left: because “the rich” make more, they’d pay more even if the percentage was the same for everyone. That can easily be equated to a kind of progressive income tax, especially if the code is so simplified, and loopholes closed.

Let the left try now to block the compromise. That will hurt them. But just because they are griping about the deal doesn’t necessarily mean it is a good deal for us. The message of the November elections was to stop the spending and quit trying to turn the US into a democratic socialist state.

Adding new unfunded spending and increasing the dole to 3 years? Not what many of us were after.

Discuss.

84 Replies to “The tax compromise debacle”

  1. JD says:

    Maybe SanFranNan will push back and torpedo this whole thing ;-)

  2. Carin says:

    What’s to discuss?

    Except the idea that the left would be rebuked by anything. We have a progressive tax. I don’t think lefties understand how percentages work.

  3. Carin says:

    Yea, JD. Today will be interesting.

  4. Pablo says:

    But just because they are griping about the deal doesn’t necessarily mean it is a good deal for us. The message of the November elections was to stop the spending and quit trying to turn the US into a democratic socialist state.

    The fact that they’re forming a circular firing squad and that they were forced into that position by the party that controls nothing, save for the filibuster is a very good sign. No, it isn’t a great deal, but it was as good a deal as they could reasonably expect.

  5. Ernst Schreiber says:

    Glenn Reynolds highlights this quote from Pejman Yousefzahdeh on his front page:

    The thing is, a temporary extension of the Bush tax cuts will not be enough to stimulate the economy. Per Milton Friedman’s permanent income hypothesis, consumption patterns even in the aftermath of a temporary extension of the Bush tax cuts will be tempered by long term expectations that eventually, the tax cuts may be allowed to expire. As a consequence, consumers are more apt to save money that comes from a temporary tax cut, rather than spending it in order to offer the economy any kind of economic stimulus.

    It’s not wrong as far as it goes, but hard to see how keeping rates just as they are now was going to have any stimulus effect. Two more years of the status quo before the Dems try to take more of your income. Way to go Mitch!

    The larger problem is that we’re still stuck with the Leftist narrative. Bill Clinton’s 1993 tax increase is somehow the norm, and Bush’s tax cuts are a temporary expediency.

  6. Gaff says:

    This deal is a crap sandwich, but remember this is still with the lame duck congress, Democrats still control the House right now. All those TEA Partiers aren’t going to be seated until the 3rd of Jan.

    And if we start next year with the higher tax rates in place, I’m not sure changing them retroactively will even work (I have heard conflicting things about changing them after the 1st of the new year).

    I hope some of this stuff can be fixed next year, assuming this ‘deal’ passes.

  7. Jeff G. says:

    I realize this isn’t the TEA Party congress. But those there witnessed the November election. They had their mandate. They had cover to be conservatives.

  8. Jeff G. says:

    That’s exactly right, Ernst.

    The GOP came to the table asking for the status quo. They had to compromise out of that to reach an agreement.

    Tell me how that’s a win? They should have come to the table asking for a tax cut across the board — a lowering of the Bush tax rates to stimulate economic growth. John Kerry may have shit himself, but the point is, they never even made the case for what they ostensibly believe is necessary for economic recovery and stimulus.

  9. alppuccino says:

    There is consumption pattern and there is investment. With almost 3 trillion on the sidelines, the certainty of Cap Gains and other taxes could bring some of that money back into the game. Private money flowing can be very stimulative. Financially, that is.

  10. Ernst Schreiber says:

    If Clinton could raise taxes retroactively, we ought to be able to extend the current rates retroactively as well. Repeal the Obama tax hike! has a nice ring to it.

  11. sdferr says:

    It’s not wrong as far as it goes, but hard to see how keeping rates just as they are now was going to have any stimulus effect.

    Dan Mitchell puts it as avoiding a negative, invoking the Hippocratic Oath. So evidently, in his view, it won’t serve to make the economic outlook worse (or as much worse as it might have been) in the short-term.

    The good parts of the agreement is the avoidance of bad things, sort of the political version of the Hippocratic oath – do no harm. Tax rates next year are not going to increase. The main provisions of the 2001 and 2003 tax acts are extended for two years – including the lower tax rates on dividends and capital gains. This is good news for investors, entrepreneurs, small business owners, and other “rich” taxpayers who were targeted by Obama. They get a reprieve before there is a risk of higher tax rates. This probably won’t have a positive effect on economic performance since current policy will continue, but at least it delays anti-growth policy for two years.

  12. Jeff G. says:

    No, it isn’t a great deal, but it was as good a deal as they could reasonably expect.

    It was as good a deal as they could expect once they decided to take a ridiculous negotiating posture, that’s for sure.

    The Dems could have pushed through the hikes if they wanted to. They didn’t want to. They couldn’t afford to, or the next election would have been a bloodbath of epic proportions.

    The GOP cared only about appearances here. They didn’t want to be painted as the people who threw struggling families off unemployment at Xmas time. To me, that shows they aren’t yet ready to make the tough moves.

    They accepted the status quo — plus a bunch of additional unfunded expenditures. That’s a punt — and a shanked one, at that.

  13. alppuccino says:

    ….but I don’t disagree that asking for a total tax holiday would be a good place to start.

  14. Ernst Schreiber says:

    How much certainty does a two year extension bring with it?

  15. They had cover to be conservatives.

    But they’re not. They’re Republicans.

  16. alppuccino says:

    How much certainty does a two year extension bring with it?

    18 months worth, in which time you can double your money thrice. Call 1 800 ASK ME HOW.

  17. Jeff G. says:

    That’s right, LMC.

    So tell me: why are they the party of conservatism again?

  18. alppuccino says:

    Please, no calls.

  19. Because they wear red ties? They’re old? Hugh Hewitt says so?

  20. Ernst Schreiber says:

    sdferr, we’re supposed to be happy that the daddy party got the mommy back home and tucked into bed before she woke up the kids?

  21. sdferr says:

    How much certainty does a two year extension bring with it?

    It’s very hard to say how much certainty is gained on account of this proposition alone, if we take into account all the many other uncertainties independent of these measures, such as those we see entailed in the implementation of ObamaCare, FinReg, and other burdensome regulatory measures being taken as we write (many of these latter only coming to light with time). It seems as though Cap Gains decisions may have some better clarity, I guess. And folks who have estates larger than the $5 mil. line will begin taking measures to put them out of reach of taxation I suppose.

  22. dicentra says:

    Flat tax. The fair tax has too many problems with imports and stuff, so tax everything after, say $25,000, at lucky 13%.

    Wait. Everything?

    Repeal the 16th amendment.

    There. All better.

  23. McGehee says:

    The result is to illustrate that more results like Nov. 2 are needed — and the need to renew the Bush tax cuts again during the 2012 campaign will help in that direction.

    If it also leaves Tea Party supporters ticked off as the new Congress convenes — rather than euphoric and resting on their laurels — even better. This is a war that can never end; our greatest enemy is complacency.

    If the Establicans ever figure that out and actually start giving us what we want without our having to fight for it, that’s when we’re sunk.

  24. dicentra says:

    A two-year extension could also be: “This is the best we can do with this congress and this White House. First thing after the new congress is seated? We make it permanent.”

    Not sure why people are yammering about how this will affect 2012. Popular pressure can be brought to bear on Obama to sign such a bill next effing year.

  25. sdferr says:

    sdferr, we’re supposed to be happy that the daddy party got the mommy back home and tucked into bed before she woke up the kids?

    I don’t getcha here Ernst? Mitchell’s views in their totality make fair sense to me. That is, I think I agree with him to the extent I understand what he’s getting at, which in the main is merely that things could be much worse than they will appear to be should this measure pass, but far from any optimum we might long for.

  26. Bob Reed says:

    Well, the way I see it is the right was going to have to cave on the extension of the unemployment benefits; or else they would have faced a whirlwind of demagogic furor from the lefties and the MFM(redundant?). And since that extension is temporary, the best that could have been expected from the lame-ducks was a temporary extension of the existing rates. But I am disappointed, and distressed from the standpoint of principle, that any estate tax was re-instated; because as we all know that’s double taxation, for the most part, discounting any capital gains on investment properties that must be liquidated in the name of distributing the estate to the heirs. I can only hope that the estate tax issue will be reversed in the 112th congress.

    But, as always, YMMV.

    I see this as teeing up the notion of taxation, and budgeting, as a front-and-center issue for 2012, if not before then.

    I’d look for the Rethugs to push for paying for the costs of the unemployment extension in any budget-battling that goes on in the rest of the session; if there’s time for any, that is, amongst all of the progressive wish-list-measures that will no doubt be voted on.

    And I wouldn’t be too surprised if a tax-code reform isn’t brought up in the 112th congress; a la Paul Ryan’s Roadmap proposal. If not, or if it doesn’t make it through Congress or Past Obama’s veto, then definitely look for such tax reform to be a centerpiece of the 2012 debate as well. I mean, Erskine Bowles was praising Ryan’s ideas despite the fact that he voted against the debt commission’s final report, and predicted that 85% of it’s content would be voted on in the next House session.

    I “get” that many people, our erudite host included, see mostly downside in this deal. But I my unsolicited advice would be to not ignore its upsides; not the least of which will be the progressive infighting, the possible filibuster by Sanders, and the near certainty that this deal will lead to Obama being primaried by whoever is the next nutroot darling.

  27. Ernst Schreiber says:

    the main is merely that things could be much worse [absent this compromise]

    Mostly thinking aloud while trying to refine my partisan politics as disfunctional family analogy: By stepping up and doing the “responsible” thing we’re continuing to enable the Democrats, so to speak. We didn’t have to save them from themselves here, I think.

    My take is that both sides agreed to kick the can down the road two years in the hopes that the political environment will be more favorable to their preferred arguments going into the 2012 elections –classic example of wanting to have the issue more than wanting to resolve the problem.

  28. sdferr says:

    . . . the right was going to have to cave on the extension of the unemployment benefits; or else they would have faced a whirlwind of demagogic furor from the lefties and the MFM(redundant?).

    See Peter Berkowitz’s article on the (mis)-uses of “empathy” by progressivism. See also the sleight of hand noted in William Graham Sumner’s formulation of the forgotten man:

    As soon as A observes something which seems to him to be wrong, from which X is suffering, A talks it over with B, and A and B then propose to get a law passed to remedy the evil and help X. Their law always proposes to determine . . . what A, B, and C shall do for X.”

  29. Jeff G. says:

    . . . the right was going to have to cave on the extension of the unemployment benefits; or else they would have faced a whirlwind of demagogic furor from the lefties and the MFM(redundant?).

    No. All they had to do was insist that any extension be funded. And they could point to the elections: Americans don’t want deficit spending.

    Easy peasy.

  30. Bob Reed says:

    Well, like I said JeffG, YMMV.

    I get the feeling that a lot of folks that otherwise wouldn’t be are collecting unemployment these days; perhaps a greater number of the tea-partiers than we know. At any rate, while I haven’t seen any polling on the 13 month unemployment extension, I’d be interested if a majority actually did oppose it; my intuition says no.

    But you have a point about having to pay for the extension by cutting something else; like I mentioned, it may come become a highly visible bone of contention in any budget wrangling that happens in the 111th lame duck session.

    Heck, I’m more disappointed that they caved on the estate tax and the whole “making work pay” connivance from the stimulus.

    I’m looking for Paul Ryan’s tax plan to be put out there for a vote in the 112th.

  31. Bob Reed says:

    Forget about Waterloo, as a bonus, this may be Obama’s Poppy Booosh!, “read my lips…” moment ( http://tiny.cc/ruhroh ). Man, 70+ percent of his donors oppose this compromise.

    So there’s that.

  32. SDN says:

    Jeff, the other thing is that a lot of investor types were saying that “if the Cap Gains rates weren’t maintained there would be a bloodbath in the stock market on Dec 15th as the stock folks sold off to get the current rates before the end of the year. The unemployment stuff was small potatoes compared to that.” Comments?

  33. sdferr says:

    I think we see a glimpse of the rhetorical defeat of what we perceive as reasonable expectations of vastly smaller government (with concommitantly vastly smaller incursions into our lives) in the language even such a one as Nick Gillespie chooses to take on while advocating a mere 3.6% cut in budgets for the next ten years. Witness (my emphasis):

    Note that this exercise isn’t utopian from a small-government POV. That is, it gives oodles of money to the government to maintain a status quo that doesn’t work particularly well. But what it does do is show the relative ease of balancing the budget over time without raising government revenue. When you hear folks talking about how the “Bush tax cuts” are starving government coffers, remind them of that 60 percent increase in real spending over the past decade and point them to this chart.

    Utopia is still understood, I think, as a kind of nowhere, an unobtainable nowhere at all.

  34. Jeff G. says:

    Yes, SDN. Another reason why the GOP didn’t need to blink.

    The Dems control both chambers and the executive. If a stock market downturn took place because people pulled money to avoid capital gains penalties, that would have been on them — and they know it.

    They would have crashed to system to punish the “rich”. The GOP could have then rectified the problem in January, and the President would have been forced to veto, if he truly believed in what he was doing.

  35. SDN says:

    The problem, Jeff is that classical liberals and conservatives have been conditioned to look after the welfare of the country, which might not be served by a stock market crash.

  36. SDN says:

    Also, how does the GOP “rectify” that? Yes, they can drop the tax rates in two years, after the Copperheads lose the Senate by a filibuster proof majority and the White House, but how does that undo the damage?

  37. Jeff G. says:

    I understand that, SDN. But what I’m saying is I don’t think the Dems would have allowed that to happen. The GOP blinked.

    That’s just my take.

  38. maybe y’all have discussed it already, but who the heck doesn’t find a job of some kind in three years? as sarahk said, “if you haven’t found a job in three years maybe it’s time to consider a carreer change.”

  39. Jeff G. says:

    …or go on welfare, Maggie.

    That’s all this is: higher-wage welfare. And trust me: lots of people are gaming the system.

  40. Ernst Schreiber says:

    Here’s John Podhoretz’s take:

    The whole deal seems designed to test conservative arguments about how best to help the economy right now, with the understanding that if the economy improves markedly as a result, he [Obama] will get more credit for his role from the independents [my emphasis] he lost so decisively in the 2010 election. And if it doesn’t, then the GOP will be in the position he was in this year in relation to the stimulus — their desired policy won’t have worked either, and he won’t get blamed for acceding to political reality in going along with it.

    (via Ace)
    Now, if JPod is correct, then this compromise was a steal for Obama. He got his unemployment benefit extension welfare program and his EITC wealth redistribution device and an estate tax increase of 35%. And what did he give up? A temporary payroll tax deduction and 20% of the 55% estate tax increase. Everything else remains the same as it’s been since when? 2003? Moreover, if things turn around economically, he gets to claim credit, and if they don’t, he gets to say that Republican tax cuts for the rich don’t work (even though nobody’s taxes were cut!)

    Now, I like the sound of wailing and garment-rending coming from the left, and the salty, salty goodness of their tears as much as the next hard core rightwinger, but it seems to me that they don’t have as much to be upset about as they seem to think they do.

  41. well, truth be told, I was collecting unemployment this time last year and probably bringing in more than at my current j*b. I get that they do that, but why let them? (that’s rhetorical) I’m just a cruel, cruel conservative.

  42. Jeff G. says:

    Yup, Ernst.

    Not only that, but look: he is BUCKING the LEFTWING EXTREMISTS!

    He’s a MODERATE! A (dare I say) PRAGMATIST!

    And he didn’t have to sacrifice barely anything to throw off the charges that he’s a socialist, etc. HUGE win for Obama.

  43. Ernst Schreiber says:

    The problem, Jeff is that classical liberals and conservatives have been conditioned to look after the welfare of the country

    Yes. Which is why the daddy party does it’s best to keep the kids from learning that the mommy party is an out of control drunk and a whore.

  44. sdferr says:

    . . . he gets to say that Republican tax cuts for the rich don’t work . . .

    Just to note, without approval whatsoever, that this seems the negative image obverse of his “jobs saved or preserved” gambit, which doesn’t seem to have cost him much in skepticism or trust from the muddling middle (as a rhetorical gambit, that is, not to say people aren’t reacting to the evidence of their own eyes).

  45. cranky-d says:

    One other dirty little secret is that currently unemployment skews heavily towards lower-skilled jobs (not all of it, of course… I was funemployed for five months this year), and that one way to help unemployment in the long run would be stronger borders.

    As far as the tax rate extensions go, we can hope that Pelosi fights the compromise to the end, and a new congress will come up with a new deal. Yeah, I don’t believe that will happen either.

  46. Ernst Schreiber says:

    [T]his may be Obama’s… “read my lips…” moment.

    Bob. Jonah Goldberg also made the Bush ’41 comparison. It’s not “read my lips” though. It’s Obama’s Rio moment.

    For those of you who don’t know or don’t remember, Rio was the pre-Kyoto climate accord. Bush attended the convention, but made sure that nothing was accomplished climate-treaty wise. He thus succeeded in yet again pissing off his pissed-off base while failing to make any headway among his detractors.

    The stupid party should be so lucky.

  47. Bob Reed says:

    An interesting comparison Ernst, one that I’ll have to think on a bit. Especially in light of what Obama “got” for conceding the two year rate extension.

    And also because, really, who among the lefties will face becoming the racist that primaried Obama anyway; even moreso since Obama would automatically start with the entirety of black Dems in his pocket, no matter what, as well as the squirming white Dems that will perpetually be trying to atone for their automatic melanin based social sin.

  48. Big Bang Hunter says:

    – I think I’ll refrain from to much supposition at this point. Six months ago we were sucking wind politically, now we’re at least back in the game just in this short time.

    – As fucked up as the country is, as fucked up as Washington is, and as alarmed and angry as the electorate is, I think the one thing it’s safe to say is there’s going to be some serious shit in the coming two years, particularly because I don’t think the tax hikes freeze is enough to change the mood of the investment community, which in turn means the economy isn’t going anywhere.

    – If Pill-osi stays true to form and acts to block even this tenth of a loaf, things could get even nastier even faster.

    – All bad for America’s present, all good for America’s future. In fact if it’s bad enough we might even have a future again.

  49. Big Bang Hunter says:

    – And Jeff….If you think our side feels somewhat less than satisfied you should take a gander at what’s going on over at HuffPo.

    – The “mask of phony compassion” has fallen to the floor, as the Left shows it’s true colors, totally manic over what they see as a crushing philosophical defeat.

    – In other words, it was never about helping anyone, other than themselves to power.

  50. geoffb says:

    I see this as the first half of an old joke.

    The virtuous beautiful young wife (Obama) has just consented, for the first time, to the proposition by a seedy looking guy to sleep with him for one million dollars. Her soon to be ex-husband (the Pelosi House) may still put the kibosh on the deal but that will not change the fact that she is now seen in a different light and the next offer will and should be much lower.

  51. Big Bang Hunter says:

    – “Damaged goods”

  52. […] team! Posted by Jeff G. @ 1:49 pm Comments (1) | Trackback […]

  53. Jeff G. says:

    I’m just staunch, I guess.

    That is, I thought I heard the message in the latest elections. In fact, I was helping drive that message — as were many here.

    New unfunded spending and a return of the estate tax — plus a continuation of welfare disguised as tax credits — makes me feel like the message wasn’t really understood.

  54. Jeff G. says:

    And Jeff….If you think our side feels somewhat less than satisfied you should take a gander at what’s going on over at HuffPo.

    I don’t care about them. They are wrong about nearly everything, and they are the people responsible for destroying the country’s economy. Compromising with them is, therefore, insane.

    Repudiate them. Tell them they are wrong. Take the very stand that they want their politicians to take.

    We have on our side the fact that we are right.

  55. Stephanie says:

    I appreciate that you read my screed. But I must note a point that everyone seems to be missing…

    the unemployment extension is to continue the current tiers that are in effect. They did not add any tiers to the benefit, so a claimant will still be crapped out of the extensions at 99 weeks. No one who is collecting unemployment will be given any additional benefits and no one is going to be able to be on the dole for 3 years. 99 weeks and you’re off. If you are over age 50, you are most likely going to lose your house as very few new hires are going to that crowd. That’s the breaks.

  56. Ernst Schreiber says:

    My second hand understanding, by way of what I heard from Rush, is that if your at 98 weeks or less, your good to go for another 13 months. It’s only if you’re in your 99th week of collecting benefits that Uncle Samta Claus says no present for your stocking.

    As a mind-numbed robot, I’m going to have to call syntax error on you.

  57. Ernst Schreiber says:

    Mind-numbed robots aren’t self-aware enough to cay’re when they screw up their possessives and they’re contractions. There screwy that way, they’re.

  58. Stephanie says:

    Unemployment benefits: $56 billion. The package would also leave in place for 13 months the option to file for extended federal unemployment benefits — which go as high as 99 weeks in states hit hardest by job loss. The White House estimates it would cost $56 billion.

    http://finance.yahoo.com/news/Bush-tax-cut-deal-and-cnnm-2062204463.html?x=0&sec=topStories&pos=8&asset=&ccode=

    This is what is being reported. If you are at 50 weeks, you are allowed to continue to collect up through the 4th tier. That’s 99 weeks and that is only in states that have met the qualification of having the highest unemployement rate – not all states have 4 tiers. They did not add a new tier (that would be a 5th tier) so there is no funding for anything past 99 weeks. In this case Rush is wrong.

  59. Stephanie says:

    And as to where the 13 months comes from, that is how long it would take for those on the 1st tier get to 99 weeks. NO New tiers. No additional over the 99 weeks. Period.

  60. Stephanie says:

    I would also add that there are an estimated 2.5 million folks that will still lose benefits in the next 3 months due to reaching 99er status. Conveniently, those folks will disappear from the most reported unemployment numbers, so look for some strange looking numbers to come out after those would be workers start to disappear into the ether. The unemployment numbers are still way high; because, that many additional people are still being laid off and added to the tier process. Real unemployment is at 19% or so if you factor in those that are past collecting UI and still have no job.

  61. Jeff G. says:

    Steph: You are right; early reports got it wrong, or were confused by Obama’s statements.

    Still, the point is not the extensions themselves so much as the costs. There is still no money for this without a concurrent spending cut elsewhere to pay for it.

  62. Ernst Schreiber says:

    Rush is never wrong, Steph. Sometimes he’s not entirely correct, however. Thanks for bringing the effin’ knowledge. I guess us heartless rethuglican types are going to get to ruin some Christmases after all! Cynn should be in high dudgeon tonight.

  63. happyfeet says:

    All things considered, I think it’s the best deal we were going to get is the mantra of failshit little countries everywhere throughout time I think.

    That and “we’re number one.”

  64. Pablo says:

    the unemployment extension is to continue the current tiers that are in effect. They did not add any tiers to the benefit, so a claimant will still be crapped out of the extensions at 99 weeks.

    Everyone seems to be getting that wrong.

  65. Stephanie says:

    And when the 112th convenes, the tea party caucus plans on doing a retro paygo bill to cut spending from other areas to cover this extension. Boehner read the tea leaves on this congress and got what he could. Bachmann and others are signaling that this will be revisited in the new year and the paygo will be retroactively applied. Looks like a win to me. Total cave on the tax rates, a chance to revisit the estate tax at a later date but it doesn’t go to 55% in the mean time, and unemployment temporarily unfunded, but no grinches for Christmas.

    If this agreement falls apart, the cost of having to retro fix the tax rates is considerably more than doing it now and figuring out the funding later. It doesn’t cause hiccups in the markets and tax software upgrades can be made much more quickly without having to delay the tax refund side of things when taxes start getting filed in early February.

    The principles are not undermined in this instance as the end game has not played out. Sometimes you sacrifice your knight to take the black queen. ;)

    Fighting on principle, with the wrong chess pieces on the board, was not the right move. The right move was to work with the current pieces, line up the Ruy-Lopez move and spring the trap with the new pawns and knights in place. Letting the whole thing turn into a crap fest of problems that cost way more due to allowing the fuckup to occur was not a smart move. The costs to business alone would have been detrimental to rehiring and having to work and rework the mess in HR and all the tax software companies possibly delaying tax refunds in 2011, not to mention the possible downward spiral of the markets short term. Best to put the pieces in place and have the gambit sprung in 2011…

  66. Stephanie says:

    And yes I know that Ruy Lopez is an opening gambit, but it was the only chess term that came to mind. I haven’t played seriously in years and most of that knowledge went poof (or puff.. heh) in my college years.

  67. Stephanie says:

    One final thought. The payroll tax reduction is straight out of Paul Ryan’s little black book of ways to fix the economy. So, maybe Ruy Lopez does work.

    Obama is going to claim credit for it though, cause the republicans “haven’t presented any plans for getting the economy on track” or so goes the press meme. At this point, on principle, I don’t care who gets the credit as long as the right moves are being made. Is the end game winning political points or starting a recovery? I’ll take recovery.

  68. Jeff G. says:

    Well, I disagree, Steph.

    I’m with Pod (on the political pitfalls) and the Club for Growth (on the ideological ones). And that’s because I too am watching the chess board.

    If the end game is Obama takes credit for a stabilizing economy and can claim that he’s moved away from the radical wing of his own party (while not having to do so in any appreciable way) — and so is re-elected, and given another pseudo-mandate — we’re all screwed. Particularly when it comes to repealing ObamaCare.

    I’m hoping the crazed Kos kiddies force the Dems into wrecking the economy for a few weeks.

  69. Big Bang Hunter says:

    – No real recovery will start until 2012*, so you’ll have to keep your powder dry til then Steph.

    – Until there’s a serious change in the power base, and a return to business friendly policies, all this political infighting is just shuffling the hand grenades back and forth across the Potomac.

    *(And only then if we take back the Senate and the WH, which, after two more years of this madness, should be imminently doable.)

  70. newrouter says:

    If the end game is Obama takes credit for a stabilizing economy

    stabilizing the economy means 9-10% unemployment is the “new” normal. baracky better have sumthing better than that going into 2012.

  71. Stephanie says:

    If the end game is Obama takes credit for a stabilizing economy and can claim that he’s moved away from the radical wing of his own party (while not having to do so in any appreciable way) — and so is re-elected, and given another pseudo-mandate — we’re all screwed. Particularly when it comes to repealing ObamaCare.

    He may be taking credit, but he won’t change his stripes. He made it abundantly clear in the presser today that he will continue to play the class rhetoric card and continue to push to the left. His problem is that he can claim credit for this, and the press can provide cover, but he’s subsequent actions will all betray him. Remember that he claimed precredit for the oceans receding, too. All that’s gotten him is scorn.

    As far as repealing Obamacare, he will continue to ride that bronco even after it’s bucked him. He has no choice. The TPC (Tea Party Caucus) has the defundings scheduled for action in early 2011. He will be right back to his progressive ways fighting them. And his claims of movement back to the right will be on display (again and again and again) as hot air. Continual claims of moving back to the center will be more of an albatross around his neck as he continues to have to defend the stuff that is already in place – every single time and that will be time after time after time. And every time the right goes after one of his pet causes (which will be often), he will have to move to defend it. And each time he will be seen as defending leftist policies.

    The one benefit of all the movement by his minions behind the executive veil has been to give the conservatives a target rich environment to shoot at. All those EPA, food, and other machinations will be exposed and pushed back forcefully. Issa should provide good action on that front, too. Plus Pigford is going to get a substantial airing out. Every action by the conservatives will be against stuff that has been largely under the radar and will be done in a MOST PROMINENT WAY with Sarah providing color commentary to which the press and Obama will again attack and they will again be laid waste… I’m actually looking forward to the tag team approach that is being discussed as “rope a dope” on steroids.

    Remember this, too. Obama doesn’t take setbacks well. And he gets into further trouble every time he tries to strike back at those who have “wronged him.” I think the measure of the narcissist has been taken and the conservatives have a really good bead on how to goad him into doing exactly what will need to be done to put him firmly out to pasture.

  72. newrouter says:

    UPDATE: A Wall Street reader emails:

    Obama’s petulance sank stocks.

    Stocks were euphorically higher most of today, thanks to the unexpectedly broad tax deal the administration hammered out with the Republicans. But during his press conference, Obama’s clear anger and call to unwind the deal in 2 years opened a trap door under prices, sending them to a negative finish. We had hope, and then it changed.

    If this deal gave people the belief that Obama might grow in office, the press conference probably deep-sixed that.

    link

  73. Jeff G. says:

    I think it a bad plan to base our actions on how Obama might react to them — and then hope people both notice and are put off by the reaction.

    Again, the GOP blinked. They didn’t have to.

    If you like the compromise, fine. I don’t. But then, I’m used to disappointment by now.

    The important thing to many who are rationalizing as a win the continuation of the status quo (+ new spending, + a 35% estate tax on the wealthy, + an extension of tax credits for people who don’t pay taxes to begin with) is not that the economy will now grow at all because of this; the important thing is that the LIBERALS ARE UPSET LOL!!1!eleventy!

    Meh.

    That’s exactly how the “center” came to be defined as John Kerry.

  74. Big Bang Hunter says:

    – Here’s a portion of InsaneNan’s initial response”

    “We will continue discussions with the president and our caucus in the days ahead,” Pelosi said. “Democratic priorities remain clear: to provide a tax cut for working families, to promote policies that produce jobs and economic growth, and to assist millions of our fellow Americans who have lost their jobs through no fault of their own.”

    – Wonder how many of them voted for teh Won? (through no fault of their own.)

    – That’s a good start. We can only hope she digs in her botox heels.

  75. newrouter says:

    Again, the GOP blinked. They didn’t have to.

    they don’t control anything. this may/may not be the best that could be accomplished. but and now harry reid and nancy pelosi have to devote energy trying to get passed what their party leader wants. which takes time away from dream act et al. the clock is running: now at 24 days left for the 111.

  76. geoffb says:

    Obama’s personal, which on the left is to say political, demons will insure that he cannot take advantage of this compromise to triangulate ala WJC. The ball is now in SanFranNan’s court. Swallow or spit is her choice and neither is good as the O!-man pulled an Assange on her.

    There will be no Card Check. There will be no cap-and-trade. There will be no amnesty, no DREAM act.

    These were things that we feared would be rammed through along with letting taxes go up especially the taxes on those who invest and those who create the jobs. This lame duck could have been a disaster with damage that couldn’t be repealed for at least two years.

    The job for this session was to hold back the remaining 2008 Obama tide. January we shall see what can be accomplished with the House in R hands.

  77. Stephanie says:

    No problemo… you sound like my husband. He always focuses on the shit and downplays the fact that the puppy managed to hit the pee-pad.

    I’m enthused that the tea party has essentially kept their wick dry and still got most of the tax concessions from a decidedly left tilted congress and exec. The major fights are not til ’11 and the tea party will be demanding results then. Then we’ll see.

    And as to “I think it a bad plan to base our actions on how Obama might react to them — and then hope people both notice and are put off by the reaction” I don’t mean to imply that they are basing their actions on how O might react to them, but that the reaction is built into the calculus of the gambit. Hence, his petulance today totally scrapped the evening news meme that “the stock market reacted favorably to Obama’s announcement on taxes isn’t he a great guy!1!1!!!eleventy… he totally stepped on his dick on that one. And deprived himself and the press of the ability to tout that awesomeness.

  78. newrouter says:

    so here’s a preview of what’s ahead for baracky’s bill. it is like healthfraud with everyone putting a decoration on it.

    Sen. Harry Reid, who indicated earlier today that he was not sure if he had the votes in the Senate to pass the Obama-GOP tax compromise, has decided the bill is the perfect vehicle for a measure to legalize online poker, reports Politico.

    link

  79. Ric Locke says:

    Look at it from the other side for a moment, especially in the light of what Pelosi, et. al. are hollering.

    Yeah, this is a lousy deal for conservatives — but it was almost certainly the best deal Obama is going to have offered to him in the near future, and it looks like the nutroots are not only going to shut it down, they’re going to burn up a couple more days of the session doing that.

    So the House votes it down — and whatever they come up with to replace it will take more time, and Republicans can reasonably cite “paygo” to delay more. At this point, anything the Democrats do is either raising taxes or new unfunded obligations — and they are the “Party of No” when solutions are offered, plus there’s still no budget because they’ve been squabbling so.

    I love it.

    Regards,
    Ric

  80. Ric Locke says:

    Ooohh, newrouter, that’s perfect. I didn’t see your post before hitting [submit].

    So: How many Senate Democrats are there from states with big Indian casinos? One might usefully point out that those reliable sources of “campaign contributions” will be less than thrilled by the notion that their biggest players can now stay home… lovely scent of fratricide wafting in, from the other side for a change.

    Regards,
    Ric

  81. McGehee says:

    I tend to agree with Jeff that a bad deal doesn’t get any better just because the other side hates it.

    We’ve all said at one time or another that we don’t care what the proglodytes say about us because they’re always going to say shit about us. I don’t see why that would change just because they’re saying shit about a tax bill.

  82. Big Bang Hunter says:

    – I don’t see it as a case of simply “The other side hates it”.

    – I’m pretty sure the movers and connivers know this is the beginning of the end for hopie/changy, and that should bring everyone some much needed relief looking forward.

    – It should also stoke our fires and set our resolve now that the asshats are on the run.

  83. newrouter says:

    It should also stoke our fires and set our resolve now that the asshats are on the run.

    just watch the kooks. oh my bracky compromised =evil

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